Check Those References
By Steve Marr

A company hired a design firm to construct a new Web site. Although the final product was first-rate, the project was several months late, and getting the designers to fulfill obligations was like pulling teeth. Later, the company discovered that other clients had had similar experiences. If they had checked references before signing a contract, they might have avoided some headaches.

When selecting suppliers and contractors, checking references is the key to making the best decisions. King Solomon observed, "The naïve believes everything, but the prudent man considers his steps" (Proverbs 14:15 NASB). Some salespeople can be quite persuasive and make big promises, but we must be careful. King David warned, "They speak falsehood to one another; with flattering lips and with a double heart they speak" (Psalm 12:2 NASB). Checking references will help us weed out suppliers who don't keep their word, and understand suppliers who may do a good job despite some shortcomings.

Before you make a buying decision, ask for the names of three or four current customers that are similar to your business in size and requirements. That way you can identify-and avoid-suppliers that may do a great job with small clients, but would struggle with your large orders; or the supplier to General Motors who might have trouble focusing on your much smaller needs.

Next, make a list of key questions to ask each reference, regarding timeliness of delivery, quality of products and services, and their experience with resolving claims and disputes. When you call these references, ask specific questions. If a reference tells you that the supplier's quality is "OK," ask about their standards. Some companies have higher standards than others. Likewise, if timeliness of delivery is important to you, ask each reference how their orders were processed and confirmed, and how reliable the delivery was.

Every business will slip up from time to time. Ask your references how problems were resolved. Ask for examples of specific situations involving poor quality, late delivery, or a mix up in the order. Did the supplier admit its mistakes, apologize, and make the situation right? Past performance is always the best indicator of future performance.

After reviewing references, eliminate suppliers that have been deemed untrustworthy or non-responsive. Those are definite red flags. Take a closer look at companies whose references gave you a yellow caution light. For example, if a reference tells you that their Web design firm did great work but delivery was usually late, you may decide to move ahead anyway-if your schedule allows; but at least you'll be moving forward with your eyes wide open. On the other hand, if you're on a tight timeline, you'll know to look elsewhere for a company that can deliver on time.

If you decide to move forward despite a caution light, openly discuss your concerns about timely delivery and ask the supplier how your deadlines will be met. Also, if you know the vendor's reputation, you'll be likely to follow up sooner and more diligently. Understanding a vendor's weaknesses in advance will help you manage potential snags during the implementation process.

If possible, start small with new business relationships. Jesus said, "He who is faithful in a very little thing is faithful also in much" (Luke 16:10 NASB). Place trial orders or give a new vendor only part of your business until you have some firsthand experience of their quality of execution and delivery. If your experience is negative or fails to match up with the salesperson's promises, you can easily move on without creating a major disruption.

Benefit from the experience of others by diligently checking references. As the apostle Paul wrote, "Every fact is to be confirmed by the testimony of two or three witnesses" (2 Corinthians 13:1 NASB). Use their experience to keep you from falling into the same old traps. Your business will run more smoothly as a result.

Steve Marr is a business/ministry consultant and author of the book Business Proverbs. His daily radio feature, "Business Proverbs" is heard on 1,000 radio stations. He is the former CEO of the fourth largest import-export firm in the United States.

Website: www.businessproverbs.com